Pearson Cutting 4,000 Jobs as First-Half Sales Decline

Copies of the Financial Times newspaper, owned by Pearson Plc, are seen on display at a newsagents in London. Pearson, which spent about 176 million pounds reorganizing last year, forecast in January that net restructuring expenses will be about 50 million pounds in 2014 and it will invest about 50 million pounds to expand digital operations and businesses in emerging markets. Photographer: Chris Ratcliffe/Bloomberg

July 25 (Bloomberg) -- Pearson Plc, the publisher of the
Financial Times, said today it will have cut a total of about
4,000 jobs in the two years through 2014 and reported a sales
decline of 6.5 percent for the first half.

The cuts are equivalent to about 10 percent of the global
workforce, Chief Executive Officer John Fallon said on a
conference call today. About 3,300 of that total were removed in
2013, Pearson said in February. The cuts will be partly offset
by the creation of 1,800 jobs in the two-year period as the
London-based company expands digital and emerging-market
operations.

Pearson is positioning itself as “a global learning
services company,” Fallon said in a statement today. “This
will drive a leaner, more cash-generative, faster-growing
business from 2015.”

First-half revenue dropped to 2.05 billion pounds ($3.5
billion) from 2.19 billion pounds a year earlier, in line with
the average of analyst estimates compiled by Bloomberg, as the
strength of the pound reduced revenue converted from U.S.
dollars and other currencies.

The shares rose as much as 4.5 percent in London, the
biggest intraday jump since July last year. The stock was up 2.8
percent at 1,132 pence as of 10:09 a.m., paring the decline to
16 percent this year and giving the company a market value of
about 9.3 billion pounds.

Pearson, which gets about 60 percent of its revenue from
North America, said it would cut its full-year forecast range
for adjusted earnings per share of 62 pence to 67 pence by 1
pence if current exchange rates persist until the end of 2014.

The company said it will pay a dividend of 17 pence a
share, in line with a Bloomberg forecast.

Reorganization Costs

Pearson said in February that it wouldn’t emerge from a
difficult transition period until 2015 after earnings plunged on
weak demand in U.S. higher education and restructuring costs.
The North American education market accounts for about half of
the company’s sales.

Pearson, which spent about 176 million pounds reorganizing
last year, forecast in January that net restructuring expenses
will be about 50 million pounds in 2014 and it will invest about
50 million pounds to expand digital operations and businesses in
emerging markets.

The company also said in January that trading conditions
would remain challenging this year, with declining college
enrollments in North America. Business in the U.K. will also
also be hurt by curriculum changes affecting schools.